Despite auction heat dwelling values were tepid in February: RP Data-Rismark
After eight straight months of increases combined capital city dwelling values paused during February, according to the RP Data-Rismark home value index.
RP Data's national research director, Tim Lawless, said that despite the lax results in February, dwelling values were still up across the past quarter, predominantly due to strong growth in December and January.
Source: RP Data-Rismark
Lawless said: "The quarterly movement across the capital cities index reflects the stronger readings from January and December where dwelling values were 1.2% and 1.4% higher respectively each month."
"The February market results are in stark contrast to earlier readings where capital city dwelling values moved 2.6% higher over the past three months.
"The likelihood is that the weak reading for February is an adjustment from the strong readings in December and January rather than the beginning of a flat to negative growth phase across the macro level housing market."
According to Lawless, we may see further months of either contraction or stagnation ahead of us. Despite this, Lawless believes that it will take several consecutive months of these results until a confident assertion of a market slowdown can be delivered.
“Our view is that housing market conditions will start to wind down later this year as affordability constraints and low rental yields dampen market conditions. Additionally, with a belief that mortgage rates are likely to start tightening later this year, it may help to quell some of the exuberance we have been seeing,” Lawless said.
Chief executive officer of Rismark International, Ben Skilbeck, noted that Sydney continues to be the star performer of the Australian property markets. Sydney dwelling values rose by 0.8% in February, contributing to a quarterly rise of 2.3% and a year on year increase of 14.1%.
“When looking at individual capital cities, the Sydney market has had a surprising run of nine successive month-end increase totalling 14.1%. In keeping with what other capital cities have experienced, we would have expected some dips along the growth trajectory over a nine month period,” said Skilbeck.
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Source: RP Data-Rismark
Despite the stagnant dwelling value growth, auctions continue to rattle along across the country's capital cities.
From the 2,680 auctions over the past week a clearance rate of 72.8% was recorded by RP Data. This represents a substantial increase upon the combined clearance rate of 61% recorded on the same weekend last year.
Commenting upon the weekend auction action, analyst for RP Data Shana Miller said that: "It will be interesting to see if continuing high clearance rates encourage a further increase in the number of capital city properties taken to auction, given that current volumes are already so much higher than at the same time last year."
Source: RP Data
The top result of the week was at 2 Lodge Road, Cremorne in Sydney, where a waterfront five bedroom house sold for $5.5 million.
Dubbed 'The Cremorne Resort', the property with a swimming pool, boatshed and meandering gardens leading up to the water's edge, was marketed as "a very tightly held deep waterfront holding on one of Sydney's premier waterfront streets".
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Despite the excellent result in Cremorne, a Canterbury, Victoria property had the chance to take top place on the list.
Silchester, at 106 Mont Albert Road, Canterbury (pictured below), was listed with $6 million plus hopes but was passed in at $6.02 million at weekend auction.
There was just one bidder, according to the James Buyer Advocates report on Saturday's auction, for the property which last traded for $1.5 million back in 1993.
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RP Data expeects that over the next week 1,402 auctions will take place in the nation's capital cities.
Most expensive sales of the week ending March 2, 2014
2 Lodge Road, Cremorne, NSW, 2090, five-bedroom house, sold prior to auction on March 1 by Belle Property Mosman for $5.5 million
27 Denning Street, South Coogee, NSW, 2034, five-bedroom house, sold at auction on March 1 by McGrath Estate Agents for $4.301 million
14 Beach Street, Blakehurst, NSW, 2221, six-bedroom house, sold at auction on March 1 by McGrath Estate Agents for $4.15 million
67 Beaver Street, Malvern East, VIC, 3145, five-bedroom house, sold at auction on March 1 by Abercromby's Real Estate for $3.9625 million
35 Darling Point Road, Darling Point, NSW, 2027, six-bedroom house, sold at auction on February 26 by Richardson & Wrench Double Bay for $3.8 million
32 Sargood Street, Toorak, VIC, 3142, four-bedroom house, sold at auction on March 1 by Marshall White Armadale for $3.675 million
2/18 Carlotta Road, Double Bay, NSW, 2028, four-bedroom house, sold at auction on February 25 by Laing + Simmons Woollahra for $3.54 million
37 Howitt Road, Caulfield North, VIC, 3161, five-bedroom house, sold at auction on March 2 by Rodney Morley Persichetti Caulfield North for $3.5 million
33 Coppin Street, Malvern East, VIC, 3145, four-bedroom house, sold at auction on March 1 by Marshall White Armadale for $3.012 million
28 Wyoming Road, Dural, NSW, 2158, five-bedroom house, sold on February 28 by Guardian Realty Dural for $2.9 million